Magazine article Global Finance

Foreign Investors Remain Cautious

Magazine article Global Finance

Foreign Investors Remain Cautious

Article excerpt

Recognizing the critical need for foreign direct investment, Egypt has created a separate Investment ministry to focus on attracting new FDI. Ashraf Salman, the new minister of Investment, is the US-educated CEO of Cairo Financial Holding. He is a former head of corporate finance and investment banking at Arab African International Bank. Salman says he is aiming for $10 billion of FDI in the current fiscal year and $14 billion annually in three years.

Portfolio investors have remained engaged in Egypt, says Jan Dehn, head of research at Ashmore Group, but FDI is a more illiquid commitment. "Direct investors would look for more macroeconomic stability to be achieved and political stability maintained. Western governments appear to be more comfortable with a ruler from the military than with an Islamist government in Egypt. That could be a green light for FDI flows."

However, Samih Sawiris, Egyptian chairman and CEO of Switzerland-based Orascom Development Holding, says he does not plan to invest further in Egypt until there are changes to the legal system to protect investors. Sawiris has also called for the government to stop using force and intimidation in "the oppression of innocents."

Hani Sabra, director of Middle East research at Eurasia Group, notes, however, that the government's record on human rights won't be a major factor in FDI decisions. "Egypt never had a glowing human rights record under [former president Hosni] Mubarak. Investors will look for progress on achieving economic goals."

Needing help in developing its energy resources, the government says it will repay all debts to foreign energy companies by 2017. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.